Investors Raise Billions To Invest In Later-Stage Companies

Later-stage tech startups are getting cash infusions from big investors eager to make deals, The Financial Times (FT) reported on Wednesday (Nov. 13).

SoftBank’s record losses from over-valued deals haven’t given investors cold feet, and private funding is going strong. Investors from the U.S. are on course to break fundraising records, with $23.9 billion already earmarked for growth equity funds, the FT said, citing Pitchbook data.

Cambridge Associates managing director Michael Larsen said investment groups have triggered a “massive convergence” for late-stage startups.

“More of the prime growth happens in the private years,” Larsen told FT. “Companies are also taking a longer path and achieving more scale.”

Blackstone founder and chief executive officer Stephen Schwarzman is planning to raise $3 to $4 billion for its first growth equity fund led by former General Atlantic executive Jon Korngold, sources told FT.

Hedge fund Tiger Global Management is on the prowl to raise $3.75 billion for a January investment fund, according to a document seen by FT.

Silicon Valley’s Lightspeed Venture Partners is looking to raise funds for startups close to initial public offerings (IPO), sources told FT.

Japan’s SoftBank CEO Masayoshi Son said Vision Fund 2 is tracking to raise $108 billion despite the WeWork debacle, Uber losses and questions about the participation of Abu Dhabi and Saudi Arabia’s sovereign wealth funds. 

“It’s a longer trend, but SoftBank definitely threw fuel on the fire,” said Bob Blee, head of the corporate finance group at Silicon Valley Bank. Venture capital firms are trying to compete with larger funds, he said.

Silicon Valley Bank research indicated that there has been a record number of funding rounds that exceeded $100 million in the 12 months ending September.

B2B venture capital for payments innovators has given way to an impressive start to the fall season with more than $420 million in funding. In September, Fundbox and Tipalti were among the many startups getting massive deals.